There is a long tradition of retailers providing their customers with rewards to encourage them to place an order with the retailer, or encourage them use the retailer again. One traditional reward mechanism is to allow customers to accumulate points to earn goods. A loyalty program is a typical example [1]. The customers are provided with a particular type of card (e.g., a loyalty card, a rewards card, a point card, an advantage card, or a club card), often with barcodes or magstripes on them. By presenting the cards, the customers can enjoy either a discount on the current purchase, or accumulate points that can be used for future purchases. An alternative is to provide customers with “one-time” rewards, such as giving the customers gifts or vouchers, or entering the customers into a lucky draw
From the retailer's point of view, the rewarding mechanisms can encourage the customers to conduct more shopping, and thus raise the retailer's profits. For example, although the customers can use the points to redeem products, or enjoy discounts, the point accumulation needs a long-term shopping period, so it only will not have significant costs to the retailer if the customers use the retailers repeatedly over that period. For the one-time rewards, e.g., a lucky draw, the customers need to spend a minimum amount of money to get the reward.
Although customers do benefit from a loyalty scheme, the behaviour needed to accumulate points requires behaviour which they have to passively accept. For example, when they have become members of a program organised by a certain retailer, they will only benefit if they go back to the same retailer for their shopping; or they have to redeem their points before a certain expiration date. Therefore, customers are often incentivized to redeem their points as soon as possible. On the other hand, one-time rewards are often less than satisfactory. The vouchers often carry conditions (e.g. they can only be used on certain products which the customers do not want to buy), or the gifts are not what they need, so customers do not feel happy when they receive vouchers or gifts that do not match their personal needs. An additional disadvantage of both reward mechanisms is that in order to participate users usually have to complete a registration process, and provide private information they may prefer not to give, such as their name, IC number and contact number.
Therefore, the existing rewarding mechanisms do not provide a great enough incentive to make existing customers more loyal, or attract new loyal customers. The major reason for this is that the traditional rewarding mechanisms are not adapted to the customers' personal needs. The uniform rewards applicable to one-time rewards do not benefit all customers, while loyalty programs make the customers feel that they are forced passively to accept behaviour dictated by the retailer, instead of being encouraged.
WO 2011/1460554 [7] proposes an automated system to accumulated customer rewards, but the system requires that the user supplies a unique identifier. The selection of a reward is made by the customer himself or herself.